Share!I will be traveling from March 29 through April 6. New material will be posted intermittently. Please check back regularly for new posts, both free, and Professional Edition. To all who will be observing the holidays, all the best! Thanks for your support. – Lee Share!

Share!Net new Treasury supply will be extremely light for the balance of the second quarter and the ECB and BoJ are pumping cash like mad into the accounts of bond trading firms. What are they going to do with it? Share!

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Will The Stock Market Destroy Liquidity Faster Than The Fed Creates It? Professional Edition

The market continues to sit at a critical inflection point, at minor support on the edge of an air pocket. Some indicators hint at an upturn, but it’s by no means certain. If the SPX falls into the air pocket, it could decline sharply in the short run. That would be enough to trigger major cycle sell signals. I would consider it surprising in view of the liquidity picture, especially with the larger Fed purchases of QE3 starting to settle this month. But if the technical indicators roll over as the market breaks support, such signals would rule, regardless of the liquidity backdrop, because it is always possible for the markets to destroy liquidity faster than the central banks and their cronies might otherwise create it.